USDA Raises Exports and Lowers Corn Stocks in February WASDE

Increased corn exports by 150 million bushels

HOUSTON (ICIS)--The US Department of Agriculture (USDA) increased corn exports by 150m bushels, which lowers current ending stocks to 1.481bn bushels, in the release of the February World Agricultural Supply and Demand Estimates (WASDE) report on Monday.

With the revised figures the USDA is now projecting exports will total 1.6bn bushels and is giving some expectations that crop prices will hold firm heading into the 2014 planting season which will commence in the key growing regions over the next six weeks as weather permits.

In January the agency had projected there would be about 1.631bn bushels carried over but the latest USDA estimate paints a picture of a market growing increasingly tighter for corn supplies. Pre-report analysis had pegged the number at 1.619bn bushels.

According to the WASDE, the stock-to-use ration is now calculated at 11.1%, down from the 12.4% forecasted in January and the level of 13.7% in December 2013. A lower usage ratio typically results in the increased potential for price hikes for the vital commodity.

Analysts expressed some concern over the size of the adjustment for corn exports as the sentiment was strong that perhaps the February report would only be around 50m bushels rather than the 150m as projected by the USDA.

According to the February WASDE, the season average farm price for corn is raised 10 cents on both ends of the project range to $4.20 to $4.80 per bushel.

For soybeans the USDA increased supplies by 5m bushels to 3.46bn bushels based on higher projected imports, mainly from Canada. Soybean exports are projected at 1.51bn bushels, which is an increase of 15m bushels from January and reflects a record pace of shipments and sales through last month.

The WASDE said higher US soybean meal exports are offset by reduced domestic use which leaves soybean crush unchanged at 1.7bn bushels. The residual use has been reduced by 10m bushels in February due to tightening supplies being driven by heavy use and export sales.

The agency said it is calculating soybean ending stocks at 150m bushels, unchanged since the December WASDE was released.

The estimate for average farm price for soybeans was increased by 20 cents on both ends of the range and is now set at $11.95-$13.45 per bushel.

Commodity analysts are viewing the February WASDE as being bullish for corn while having an overall bearish tone for soybeans. At the close of the market on Monday the March corn futures closed at $4.43/bushel, down 1.2 cents, while March soybeans ended the trading session at $13.25/bushel, down 6 cents.